Is there a difference between these retail terms? And does it really matter where it counts – to sales?
In the world of retail, you are probably used to hearing and using the words “CPG” (Consumer Packaged Goods) and “FMCG” (Fast-moving Consumer Goods) interchangeably. And for the most part, you’ll do just fine spending a whole career using these two words that way. If you want to impress the real industry sticklers, though, know that there are distinctions between “FMCG” and “CPG” that may help you better understand the nuances of navigating the retail industry.
What does “CPG” mean?
Some here will claim that “CPG” is totally the same as “FMCG”, but we’re here to clarify that there is at least one feature that sets “consumer packaged goods” apart. Your first hint is that “CPG” is conspicuously missing the “fast” part of the name. CPG brands, while still “fast”, are sold just a bit more slowly than brands technically termed “FMCG”.
For example: Imagine you’re at your favorite local big box retailer. You stop in to purchase your weekly groceries, but you also wander into the cosmetics section and buy yourself a new nail polish color or face mask – it’s not as “fast-moving” a consumer good as, say, potato chips, or something that goes in your grocery cart every week, but it is still relatively cheap, and purchased with relative frequency.
What does “FMCG” mean?
As a general rule, “FMCG” refers to products that consumers use (almost) every day, for example, soap, shampoo, deodorant and toilet paper, and foods and beverages like coffee creamer or potato chips. Like products termed “CPG”, “FMCG” products are regular purchases, but you can think of “FMCG” as a subset of “CPG” – a group of products that just sell a bit faster.
What are the main differences between “CPG” and “FCMG”?
Nuances like these may not be relevant to everyone in the retail industry, but one of the most important differences between “CPG” and “FMCG” is the way we talk about sales. If this is your area in the retail industry, you’ll need to be cognizant of the impact these differences have on sales velocity. For example, let’s say a manufacturer sells a million dollars worth of milk. Let’s say that same manufacturer sells a million dollars worth of cat litter. These are very different sales achievements. It’s a lot easier to achieve volume in milk sales – an FMCG used every day – than in litter sales.
One more way these terms differ is in their regional use: You may notice that in North America, industry folks are inclined to use “CPG”, whereas internationally, “FMCG” seems to be the preferred nomenclature.
Ultimately, while it’s helpful to be informed of these nuances in the ways these terms may be used, you’re unlikely to be policed for using one over the other. The key thing to remember is that both CPG and FMCG brands are:
Get the advanced analytics you need to take your small CPG business to the next level.
Start with a free alert and report today.